Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 96:

In page 38, before section 53, but in Part 8, to insert the following new section:“53.—Part VIIB of the Central Bank Act 1942 (as inserted by section 16 of the Central Bank and Financial Services Authority of Ireland Act 2004) is amended as follows:

(a) by inserting the following paragraph after paragraph (d) of section 57BB:

“(e) to enable the Financial Services Ombudsman to publish and report upon:

(i) complaints made to his Office about the conduct of regulated financial service providers, and
(ii) the investigation and adjudication by his Office of complaints made to it about the conduct of regulated financial service providers.”;

(b) by deleting the second sentence in section 57BG and substituting the following:

“Such a report may include particulars or comments on any complaint that has been investigated and/or adjudicated by the Financial Services Ombudsman.”;

(c) by deleting subsection (2) and inserting the following in section 57BH:

“(2) Such a Committee is entitled to request the Chairperson of the Council to provide information relating to any complaint that has been investigated and/or adjudicated by the Financial Services Ombudsman, including details pertaining to the number and nature of complaints made against individual regulated financial service providers.”;

(d) by deleting paragraph (a) and substituting the following in section 57BS:

“(a) a summary of all complaints made to that Ombudsman during the preceding financial year, including:

(i) details of the regulated financial service providers against whom those complaints were made,
(ii) details of the nature of the complaints made against financial service providers, and
(iii) the results of the investigations into those complaints, and”;

(e) by deleting subsection (1) and substituting the following in section 57BV:

“(1) The Financial Services Ombudsman is required to provide the Council or the Minister with such reports relating to the activities of the Bureau as the Council or the Minister requires from time to time. Such a report may include particulars or comments on any complaint that has been investigated and/or adjudicated upon by the Financial Services Ombudsman.”;

(f) by deleting subsection (2) and inserting the following in section 57BW:

“(2) Such a Committee is not entitled to request the Financial Services Ombudsman to provide information relating to any complaint that is currently under investigation. However, the Committee is entitled to request the Financial Services Ombudsman to provide information relating to any complaints that have been investigated and/or adjudicated by the Financial Services Ombudsman.”;

(g) to insert the following subsection after subsection (7) in section 57CI:

“(7A) The Financial Services Ombudsman shall publish a copy of his finding in the report referred to in section 57BS and it shall include details of the identity of the financial services provider that was investigated and adjudicated upon by him.”.”.

This issue would be colloquially known as the "name and shame" provision, giving the Financial Services Ombudsman the power to publish the complaints records of individual financial service providers. Successive ombudsmen have called for this power and I welcome the fact that the Minister is making a move in that direction. We had a Private Members' Bill dealing with the issue some time ago, which forms the basis of our amendment. It is very important that these changes are made and it will certainly help to hold repeat offenders to account in the financial services area and weed out the remaining bad practices that remain. It will be an important consumer protection tool if it is properly implemented.

Having welcomed the fact that the Minister is making some moves, I want to make some comments on amendment No. 97. The Minister is proposing to give the ombudsman the power to issue a report if he or she believes it in the public interest to do so in circumstances in which a financial service provider has in the previous year had at least three complaints relating to it upheld by the ombudsman. The Minister is setting the bar quite high, particularly for large financial services providers, as having three complaints upheld would be par for the course and no big deal. Other providers may not complete many transactions in the year and if they had two complaints upheld every year, it would be in the public interest for them to be reported. The bar has been set too high and it should be possible to publish this information in an aggregate form, as consumers have the right to know if complaints against financial services firms have been upheld.

I also question the information that the ombudsman is allowed to publish, which equates to the name of the provider against whom three complaints have been upheld, the identity of any group that the provider may be a member of and the number of complaints found to be substantiated or partly substantiated against that provider. There does not appear to be any provision whereby the ombudsman can provide descriptions of the types of complaint that have been upheld against a provider, which is crucial information, so I hope the Minister will address the issue. For example, if it is reported that four complaints have been upheld against AIB and Bank of Ireland, the information is meaningless, as they could relate to interest rates, fees, charges or the mis-selling of payment protection or investment products. The ombudsman should be given the power to describe the subject area of the upheld complaint.

I note that the Minister is proposing that if a financial services firm appeals a decision of the ombudsman, the ombudsman is not allowed to report the fact that there was a finding against a provider when it is subject to appeal. That is unnecessary; there could be a footnote to the effect that a firm has had five complaints upheld with three under appeal, for example. Otherwise, I am concerned that appealing may become a delaying tactic to prevent information from being published and put into the public domain.

I welcome the fact that the Minister is making some moves, but his proposals are overly restrictive. I would appreciate it if the Minister could respond to my points and be open to improving the process.